-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JaBFP40VXMG9NxTd+tYvEL8Jf8nieUJz84rqyVsFTk+67vB4wfaEykjuKEbyPmu7 AiEC2Fs2w6p8oiWarDmFgg== 0001019687-07-002600.txt : 20070815 0001019687-07-002600.hdr.sgml : 20070815 20070815132834 ACCESSION NUMBER: 0001019687-07-002600 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070814 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070815 DATE AS OF CHANGE: 20070815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Emrise CORP CENTRAL INDEX KEY: 0000854852 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 770226211 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10346 FILM NUMBER: 071058964 BUSINESS ADDRESS: STREET 1: 9485 HAVEN AVENUE STREET 2: STE 100 CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 BUSINESS PHONE: 9099879220 MAIL ADDRESS: STREET 1: 9485 HAVEN AVENUE STREET 2: STE 100 CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 FORMER COMPANY: FORMER CONFORMED NAME: MICROTEL INTERNATIONAL INC DATE OF NAME CHANGE: 19951117 FORMER COMPANY: FORMER CONFORMED NAME: CXR CORP DATE OF NAME CHANGE: 19920703 8-K 1 emrise_8k-081407.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (EARLIEST EVENT REPORTED): AUGUST 14, 2007 EMRISE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-10346 77-0226211 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) file number) Identification No.) 9485 HAVEN AVENUE, SUITE 100 RANCHO CUCAMONGA, CALIFORNIA 91730 (Address of principal executive offices) (Zip code) (909) 987-9220 (Registrant's telephone number, including area code) NOT APPLICABLE Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 14, 2007, EMRISE Corporation issued a press release entitled "EMRISE Corporation Announces Second Quarter 2007 Results Including Record Quarterly Sales of $12.1 Million and Record Backlog at June 30, 2007 of $27.4 Million". A copy of the press release is attached hereto and incorporated by reference as Exhibit 99.1. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS d. Exhibits: 99.1 Press Release titled "EMRISE Corporation Announces Second Quarter 2007 Results Including Record Quarterly Sales of $12.1 Million and Record Backlog at June 30, 2007 of $27.4 Million" dated August 14, 2007. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EMRISE CORPORATION Dated: August 15, 2007 By: /S/ D. JOHN DONOVAN ----------------------------------- D. John Donovan, Vice President of Finance and Administration (principal financial officer) 3 INDEX TO EXHIBITS ATTACHED TO THIS REPORT EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release titled "EMRISE Corporation Announces Second Quarter 2007 Results Including Record Quarterly Sales of $12.1 Million and Record Backlog at June 30, 2007 of $27.4 Million" dated August 14, 2007. 4 EX-99.1 2 emrise_8kex99-1.txt PRESS RELEASE EXHIBIT 99.1 NEWS EMRISE CORPORATION 9485 Haven Avenue Suite 100 Rancho Cucamonga, CA 91730 (909) 987-9220 o (909) 987-5186 www.EMRISE.com ================================================================================ FOR IMMEDIATE RELEASE CONTACT: Rory Mackin John Donovan Hill & Knowlton VP Finance & Administration (212) 885-0455 EMRISE CORPORATION rory.mackin@hillandknowlton.com (909) 987-9220 ext. 3201 EMRISE CORPORATION ANNOUNCES SECOND QUARTER 2007 RESULTS INCLUDING RECORD QUARTERLY SALES OF $12.1 MILLION AND RECORD BACKLOG AT JUNE 30, 2007 OF $27.4 MILLION RANCHO CUCAMONGA, CALIFORNIA, August 14, 2007 - EMRISE CORPORATION (NYSE ARCA: ERI), a multi-national manufacturer of defense, aerospace and industrial electronic devices and communications equipment, today announced its second quarter 2007 financial results. EMRISE's Chairman, President and CEO, Carmine T. Oliva, said, "We are pleased with the $12.1 million of record sales that we achieved in the second quarter of 2007. This represents a 12% increase in sales over the same period in the prior year. This sales level is reflective of our strong organic growth in sales of military power supplies and network access equipment at our foreign subsidiaries in England and France. We were able to achieve this top line growth even though our sales were negatively affected by approximately $410,000 of delayed power supply shipments this quarter as a result of moving our RO Associates ("RO") power supply subsidiary from Sunnyvale California to our CXR Larus facility in San Jose, California and simultaneously transitioning RO to an outsourced contract manufactured production model. We have begun to ship, and anticipate completing shipment, of these power supply orders during the fourth quarter. In addition, our customer, the U.S. government Defense Supply Agency ("DSA"), delayed the release of digital switch stocking orders, some of our Digitran division's highest gross margin product. We had expected to receive and ship approximately $620,000 of these orders, which we anticipate to be received and shipped in the second half of 2007. "We are especially pleased with our backlog at June 30, 2007, which reached a record $27.4 million. We believe that when sales recorded during the first half of 2007 are coupled with shipments of backlog orders and anticipated future orders during the remainder of 2007, we will be able to achieve our previously issued guidance of $55 million in annual sales for 2007, which would represent 18% organic growth in sales over 2006." -more- Mr. Oliva added, "Although we are disappointed to report a loss for the quarter, we are optimistic about our prospects for profit improvement in the remaining two quarters of 2007, particularly given that the results for the second quarter of 2007 include one-time negative net income impacts of approximately $90,000 related to the transition to a contract manufacturer for the manufacture of RO products and $240,000 related to RO move costs. In addition, gross profit on the delayed release of the digital switch stocking orders by the DSA would have been approximately $500,000. "Our cash position remained relatively unchanged from first quarter of 2007 and was $2.8 million at June 30, 2007 as compared to $3.3 million at March 31, 2007." SECOND QUARTER FINANCIAL SUMMARY - -------------------------------- o EMRISE reported net sales of $12.1 million for the quarter ended June 30, 2007, an increase of 12% compared to net sales for the second quarter of 2006. o Gross margin for the second quarter of 2007 was $4.1 million or 34% of net sales. This compares to a gross margin of $3.8 million, or 32% of net sales, in the first quarter of 2007 and a gross margin of $3.8 million or 35% of net sales in the second quarter of 2006. o Operating loss for the second quarter of 2007 was $438,000. This compares to an operating loss of $598,000 in the first quarter of 2007 and an operating loss of $798,000 in the second quarter of 2006. o Net loss for the second quarter of 2007 was $623,000. This compares to a net loss of $792,000 in the first quarter of 2007 and a net loss of $1.0 million in the second quarter of 2006. o Loss per share for the second quarter of 2007 was $0.02, as compared to a loss of $0.02 per share for the first quarter of 2007 and a loss of $0.03 per share in the second quarter of 2006. Loss per share for each of these periods was based upon 38.1 million basic and diluted shares outstanding. SECOND QUARTER FINANCIAL HIGHLIGHTS - ----------------------------------- NET SALES, ELECTRONIC DEVICES SEGMENT - Our electronic devices segment reported net sales of $8.4 million for the quarter ended June 30, 2007, an increase of 7% compared to the second quarter of 2006 and a decrease of 1% over the quarter ended March 31, 2007. The increase in sales for our electronic devices segment is primarily the result of higher military power supply sales in our foreign subsidiaries due to shipments for some key contracts delivered in the second quarter of 2007 offset slightly by declines in our domestic operations due primarily to the delayed receipt of DSA stocking orders for our digital switches. NET SALES, COMMUNICATIONS EQUIPMENT SEGMENT - Our communications equipment segment reported net sales of $3.6 million for the quarter ended June 30, 2007, an increase of 25% compared to the second quarter of 2006 and an increase of 7% over the quarter ended March 31, 2007. The increase in net sales for our communications equipment segment is primarily due to increased sales of network access equipment at our French subsidiary as a result of long-term efforts to focus on our core military and telecommunications markets partially offset by declines in our domestic legacy network access and other timing equipment. We expect communication equipment sales to continue to increase in future periods due to the recent introduction of our new TiemPo(TM) edge network timing equipment. -more- GROSS PROFIT, ELECTRONIC DEVICES SEGMENT - Our electronic devices segment reported a gross profit of $2.8 million or 33% of net sales for the quarter ended June 30, 2007 compared to a gross profit of $2.7 million or 34% of net sales for the second quarter of 2006 and $2.6 million or 31% of net sales for the quarter ended March 31, 2007. The decrease in gross margin from second quarter of 2006 is due, in part, to intentional changes in product mix to higher growth, lower margin commercial avionics, especially for In-Flight Entertainment and Communication products, as compared to lower growth, higher margin military avionics. In addition, the second quarter gross margin was negatively impacted by the delayed receipt of higher margin digital switch orders from the DSA as well as temporary gross margin reductions incurred during RO's transition of production to an outside contract manufacturer. GROSS PROFIT, COMMUNICATIONS EQUIPMENT SEGMENT - Our communications equipment segment reported a gross profit of $1.3 million or 35% of net sales for the quarter ended June 30, 2007, compared to a gross profit of $1.1 million or 37% of net sales for the second quarter of 2006 and $1.2 million or 36% of net sales for the quarter ended March 31, 2007. The decrease in gross margins is due to competitive pricing pressures related to our legacy network access and other timing products offset, in part, by increased sales of higher margin military network access products at our French subsidiary. We expect margins to improve in future periods due to the recent introduction of our higher margin Tiempo(TM) edge network timing device, which is being built for us by Hitachi. OPERATING EXPENSES - Operating expenses were $4.5 million or 37% of net sales in the second quarter of 2007 compared to $4.4 million or 37% of net sales in the first quarter of 2007 and $4.6 million or 42% of net sales in second quarter of 2006. OPERATING LOSS - Operating loss in the second quarter of 2007 was $438,000 compared to an operating loss of $598,000 in the first quarter of 2007 and an operating loss of $798,000 in the second quarter of 2006. NET LOSS - Net loss for the second quarter of 2007 was $623,000 as compared to a net loss of $792,000 in the first quarter of 2007 and a net loss of $1.0 million in the second quarter of 2006. LIQUIDITY - --------- WORKING CAPITAL - Working capital at June 30, 2007 was $7.7 million compared to $8.6 million at March 31, 2007 and $9.6 million at December 31, 2007. CASH - Our cash balance at June 30, 2007 was $2.8 million compared to $3.3 million at March 31, 2007. BACKLOG - Backlog at June 30, 2007 was a record $27.4 million, a significant portion of which is shippable in 2007. This compares to backlog of $23.4 million at March 31, 2007 and $24.9 million at June 30, 2006. WEBCAST AND CONFERENCE CALL INFORMATION A live audio webcast of EMRISE's second quarter 2007 financial results call will be available at http://www.investorcalendar.com/. The call begins today at 8:00 AM (PDT) / 11:00 AM (EDT). To participate in the conference call, dial the following phone number 5 to 10 minutes prior to the scheduled conference: 877-407-9210. International callers should dial 201-689-8049. There is no pass code required for this call. A replay of the call will be available through midnight November 14, 2007 by calling 877-660-6853 in the United States or 201-612-7415 for calls from outside the United States. The conference ID is 251617, Account number 286. -more- ABOUT EMRISE CORPORATION EMRISE Corporation is a multi-national manufacturer of defense, aerospace and industrial electronic devices and communications equipment. EMRISE's electronic devices group, which consists of EMRISE Electronics Corporation and its international subsidiaries, provides power conversion, RF and microwave devices, and digital and rotary switches to the North American, European and Asian electronic markets. EMRISE's communications equipment group, consisting of CXR Larus Corporation and its subsidiary, CXR Anderson Jacobson, provides network access and communication timing and synchronization products to the North American, European and Asian communications industry. Founded in 1983, EMRISE operates out of facilities in the United States, England, France and Japan. As June 30, 2007, EMRISE had a total of 304 employees in its various subsidiaries and divisions. Website: www.EMRISE.com. Listed on NYSE Arca under the ticker symbol: ERI. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 - -------------------------------------------------------------------------------- With the exception of historical information, the matters discussed in this press release, including without limitation, forecasts regarding orders, sales, shipments, revenues, margins and profitability, and statements regarding EMRISE's ability to achieve $55 million in annual sales for fiscal year 2007, improve bottom line performance in 2007 or any future periods, generate positive cash flow from operations, successfully increase sales and/or increase gross profit as a result of increased shipments of the new Tiempo(TM) timing equipment, are forward-looking statements that involve a number of risks and uncertainties. The actual future results of EMRISE could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to: EMRISE's ability to meet its working capital needs, fund existing and anticipated product development efforts, identify and successfully negotiate, fund and integrate past and future acquisitions and improve operating efficiency and realize anticipated synergies; the ability to lower costs and increase profitability due to the integration and growth of acquired or potentially acquirable businesses; the receipt and timing of contracts, orders and payments from existing and potential customers for EMRISE's products and services, including, but not limited to, the receipt and shipment of anticipated orders from the U.S. Government's Defense Supply Agency for digital switches and the ability of EMRISE to ship delayed power supply orders for its RO subsidiary; EMRISE's ability to produce and fulfill delayed and backlog orders; the receipt of production materials and resale products in a timely fashion; market and economic conditions; EMRISE's level of success in positioning itself in the market for in-flight entertainment products; EMRISE's ability to continue or improve on its existing organic growth rates in both its electronic device and communication equipment segments; changes in technology, governmental regulations and policies and customer requirements, competitive products and services; unforeseen technical issues; unexpected changes in typical seasonal sales trends and those factors contained in the "Risk Factors" Section of EMRISE's latest Form 10-K and Form 10-Q and other public filings. # # # Tables follow EMRISE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share amounts) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, -------------------- -------------------- 2007 2006 2007 2006 -------- -------- -------- -------- Net sales $ 12,067 $ 10,817 $ 23,989 $ 21,551 Cost of sales 7,991 7,025 16,065 13,375 -------- -------- -------- -------- Gross profit 4,076 3,792 7,924 8,176 Operating expenses: Selling, general and administrative 3,849 3,698 7,585 7,465 Engineering and product development 665 892 1,375 1,614 -------- -------- -------- -------- Total operating expenses 4,514 4,590 8,960 9,079 -------- -------- -------- -------- Loss from operations (438) (798) (1,036) (903) Other income (expense): Interest income 36 21 55 46 Interest expense (170) (93) (320) (217) Other, net 100 (44) 165 (36) -------- -------- -------- -------- Total other income (expense), net (34) (116) (100) (207) -------- -------- -------- -------- Loss before income taxes (472) (914) (1,136) (1,110) Income tax provision (benefit) 151 96 279 222 -------- -------- -------- -------- Net loss $ (623) $ (1,010) $ (1,415) $ (1,332) ======== ======== ======== ======== Earnings per share: Basic $ (0.02) $ (0.03) $ (0.04) $ (0.04) ======== ======== ======== ======== Diluted $ (0.02) $ (0.03) $ (0.04) $ (0.04) ======== ======== ======== ======== Weighted average shares outstanding Basic 38,141 38,082 38,130 37,880 ======== ======== ======== ======== Diluted 38,141 38,082 38,130 37,880 ======== ======== ======== ======== EMRISE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) JUNE 30, DECEMBER 31, 2007 2006 -------- -------- ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 2,824 $ 3,802 Accounts receivable, net of allowances for doubtful accounts of $297 at June 30, 2007 and $391 at December 31, 2006 8,224 9,220 Inventories 11,473 10,575 Deferred income taxes 729 726 Prepaid and other current assets 1,227 1,082 -------- -------- Total current assets 24,477 25,405 Property, plant and equipment, net 2,309 2,245 Goodwill 13,091 12,995 Intangible assets other than goodwill, net 3,384 3,546 Other assets 743 594 -------- -------- Total assets $ 44,004 $ 44,785 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,283 $ 4,640 Accrued expenses 5,658 5,309 Borrowings under lines of credit 4,017 4,310 Current portion of long-term debt 501 516 Notes payable to stockholders, current portion 500 500 Income taxes payable 775 519 -------- -------- Total current liabilities 16,734 15,794 Long-term debt 301 533 Notes payable to stockholders, less current portion 1,000 1,250 Deferred income taxes 1,053 1,053 Other liabilities 917 982 -------- -------- Total liabilities 20,005 19,612 Commitments and contingencies (See Note 7) Stockholders' equity: Preferred stock,$0.01 par value. Authorized 10,000,000 shares, zero shares issued and outstanding -- -- Common stock,$0.0033 par value. Authorized 150,000,000 shares; 38,144,000 and 38,082,000 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively 126 125 Additional paid-in capital 43,149 43,083 Accumulated deficit (20,148) (18,733) Accumulated other comprehensive income 872 698 -------- -------- Total stockholders' equity 23,999 25,173 -------- -------- Total liabilities and stockholders' equity $ 44,004 $ 44,785 ======== ========
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